This means that you should always maintain a diversified portfolio which includes some cash holdings; and you should never invest any money that you can’t afford to lose.

Once you are comfortable with the risk involved, you can start looking at the few remaining places where you can invest your money to beat inflation.

Stocks and Shares Investments

As a short-term investment, stocks and shares can be pretty nerve-wracking.

The stock market can be extremely unpredictable and volatile, and it can be impacted by any number of outside factors.

But over the long term, the major stock exchanges tend to deliver good returns. For instance, between 22 September 2007 and 22 September 2017, the FTSE 100 reached a low of 3,760.70 and a high of 7,586.45.

Yet if you had invested in a FTSE 100 tracking ETF or fund at the start of this period, you would have seen double digit returns by now.

If you are investing in stocks and shares, make sure you invest within an ISA wrapper, which will protect your returns, and be prepared to leave your money in there for at least a few years.

Investing in Fixed Rate Bonds

Bonds have always been a popular safe haven for investors, but the latest government-backed bonds have offered sub-inflation returns.

For higher yields, investors have to look towards the world of corporate bonds instead, and unsecured mini-bonds in particular.

Compare the Top 10 Fixed Rate Bond Rates

Alternative Finance and P2P Investments

The alternative finance sector has won a lot of new fans over the past couple of years, as frustrated investors search for new opportunities to make money.

Crowdfunding, peer to peer lending, and even hedge funds have seen an influx of retail investments, and the recently-launched Innovative Finance ISA (IFISA) has allowed some platforms to offer tax free returns of up to 12 per cent.

Like mini-bonds, alternative finance investments are not covered by the FSCS, but they are regulated closely by the FCA.

Nevertheless, it is important to be fully aware of the variations between each investment and each company before you invest.

Investing in Hard Assets

Hard assets such as classic cars, fine wine, jewellery and art have been gradually increasing in value as cash ISAs and government bonds have declined.

In fact, the value of fine wine rose by a whopping 25 per cent last year while classic cars were up by 457 per cent between 2004 and 2016, as investors sought out tangible assets that will at least hold their aesthetic value, even if the prices drop.

The luxury markets always do well in times of austerity, but if these hard assets are damaged in any way, it can have a huge impact on their value.

Any valuables should always be fully insured, and stored according to the insurer’s instructions.

And if you do decide to take advantage of the booming wine market, just make sure you don’t ‘accidentally’ drink your profits.

Home » Savings » Where You Can Invest Your Money to Beat Inflation in 2017

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.

Please note: The information provided on this site does not constitute financial advice. The value of investments can go down as well as up and your capital may be at risk. Always speak to a qualified independent financial advisor if you require advice.

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